Your Credit Score
 The credit score is also referred to as a
FICO Score and is a mathematical formulae created by Fair Isaac and Company.
The credit score is used by most companies
to see if you are a good credit risk or not. Equifax and Trans Union will
crunch the numbers from the credit report, and spit out a number somewhere
between 300 and 900, or even no number or R for Reject. A score over 680+ is
considered excellent.
How Scores Are
Calculated
How you can improve
your credit score
1.
Order a copy of your credit report
annually, review it carefully and correct any significant errors:
2.
Pay your bills on time
3.
If you have a questionable credit history,
you should open a few new accounts, use them responsibly, and pay them off on
time
4.
Don’t open accounts then don’t use
them. Having 6 or 7 of the same type
of credit card does not work in your favour
5.
Have a credit card or instalment loan can
help boost your score, so long as you don’t have a high balance
6.
Keep balances low in relation to the
available credit. If the credit limit
is say $10,000, keeping the balance below $2,500 (or 25% of the limit) will
improve your score, balances over $7,500 (75% of the limit) will decrease the
score. Going over the limit has an
even more negative effect
7.
Pay off credit card debt instead of moving
it around to lower rate cards. Moving
balances to other credit cards and closing out the old account can hurt the
score
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